The online auction start-up Auctionata Paddle8 AG filed a request to open insolvency proceedings on January 16, according to publicly accessible documents published by the Amtsgericht Charlottenburg, the district court responsible for the company’s headquarters in West Berlin.

Auctionata, founded in 2012, has reportedly been under financial strain recently; last week, the German business news weekly WirtschaftsWoche reported on the company’s recent troubles, including layoffs and failure to pay employees’ December 2016 salaries.

Recommended Reading

“This was necessary,” said CEO Thomas Hesse, confirming the insolvency filing to WirtschaftsWoche on January 19, “because a required financing could not be secured quickly enough.”

Hesse, however, doesn’t seem to have given up just yet. He explained that, moving forward, the company has plans to restructure, with the goal of recapitalizing, and added that there are “promising” talks with potential new investors. Auctionata also plans to separate from its New York office to focus on its main branch in Berlin.

According to German law—which does not differentiate between bankruptcy and insolvency—the administrator of the preliminary insolvency proceedings (which can take up to three months) secures the debtor’s assets in order to ascertain that legal fees can be paid, and that employees receive salaries.

Despite the opening of insolvency proceedings, the company’s auctions will continue, as the luxury objects remain property of their consignors.

Paddle8’s agreement in principle, announced in a press release, details a sponsorship from a “market-leading investor group,” that will “support and fund Paddle8’s original founding team and management.”